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    Home»Bitcoin»A breakout is brewing in this bitcoin-linked stock. How to trade it
    Bitcoin

    A breakout is brewing in this bitcoin-linked stock. How to trade it

    August 26, 20263 Mins Read


    If Bitcoin’s recovery has legs, Strategy provides a vehicle to magnify the move. Its capital structure has transformed it into a high-beta vehicle for expressing a view on Bitcoin. Strategy itself describes MSTR as providing “amplified exposure” holding more than 843K BTC as of its latest update. The timing is optimal since Bitcoin itself is beginning to recover. Bitcoin pushed above $80,000 this week to a multi-month high on a weak U.S. dollar, and renewed concerns around currency debasement driving capital toward alternative assets. Bitcoin is up 28% in August, while the US Treasury’s efforts to stabilize the bond markets have created a more supportive backdrop for Bitcoin. MSTR is now confirming that by breaking out with relative strength improving. If Bitcoin continues higher, the operating leverage embedded in its capital structure could produce an amplified move. Trade timing & outlook MSTR recently broke above its $100 resistance level and its 50-day moving average, suggesting a shift in momentum. Breakout confirmation: The move above $100 was coupled with strong volume, suggesting a continuation towards our $150-160 upside target. Relative strength: MSTR has outperformed the S & P 500 as Bitcoin recovers, suggesting potentially institutional accumulation. Bitcoin & capital structure backdrop Strategy remains the largest publicly holder of Bitcoin, making MSTR the most direct leveraged equity proxy. The company continues to maintain a capital structure specifically designed around expanding Bitcoin exposure. MSTR has also strengthened its liquidity with roughly $1.6 billion of cash for potential Bitcoin purchases, and share repurchases, giving them more flexibility to navigate the volatility in Bitcoin. Unlike owning Bitcoin directly, MSTR introduces leverage, financing, and a capital-structure that can outperform Bitcoin during rallies. Options trade To express a bullish view with defined risk, I’m looking at Buying the Oct. 16, 2026 $125 / $160 Call Vertical @ $10.03 Debit. This entails: Buying the Oct. 16, 2026 $125 Call Selling the Oct. 16, 2026 $160 Call Maximum Risk: $1,003 per contract if MSTR is below $125 at expiration Maximum Reward: $2,497 per contract if MSTR is above $160 at expiration Breakeven: $135.03 View this trade on OptionsPlay for updated pricing . Summary If Bitcoin’s momentum continues, Strategy’s treasury and capital structure could allow MSTR to outperform Bitcoin. If you’re willing to accept the additional volatility and financing risk, the Oct call vertical offers a defined-risk way to gain exposure for a sustained rally toward $160. DISCLOSURES: Zhang has a position in MSTR. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.



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